Martinet’s CEO thinks that the company has good reason to outsource so

QUESTION

Martinet’s CEO thinks that the company has good reason to outsource some of its processes to Latin America. Which of the following, if true, strengthens the CEO’s argument?

A) Many Latin American countries have strained relations with the United States.
B) Shipping costs to and from Latin America are high.
C) Labor in Latin America is much less expensive than in the United States.
D) Labor organizations in Latin America often advocate workers’ strikes.
E) Latin American companies have a very different business culture than U.S. companies.

ANSWER

Answer: C
Explanation: C) Much less expensive labor would be a good reason to outsource since it is a way for the company to potentially greatly reduce costs. Choice A weakens the case for outsourcing to Latin America since politically strained relations could easily affect business adversely. Choice B makes it more expensive to do business, which would be a drawback, unless it were offset by significant savings in some other way. Choice D weakens the case for outsourcing to Latin America since work may be frequently interrupted by strikes. Choice E suggests that U.S. companies may have problems working and communicating within Latin American countries.